A Leveraged ETF is like a traditional ETF on steroids. By using financial derivatives and debt, a leveraged ETF can amplify the returns of an underlying index.For example, if the underlying index goes up 1%, a 2:1 leveraged ETF would aim for a return of 2%. And if the underlying index goes down 1%, a 3:1 leveraged ETF would aim for a return of 3%. Of course, this leverage comes with higher risk. So before investing in a leveraged ETF, be sure to do your homework and understand the risks involved.
